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Aptiv (APTV) Beats on Earnings in Q2, Raises '18 Guidance

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Aptiv PLC (APTV - Free Report) reported better-than-expected second-quarter 2018 results.

Adjusted earnings of $1.40 per share surpassed the Zacks Consensus Estimate by 3 cents and came above the guided range of $1.33-$1.39 per share. Revenues came in at $3.7 billion, which surpassed the consensus mark by $134 million and the guided range of $3.5-$3.6 billion.

In the quarter, Aptiv completed the acquisition of KUM and announced the buyout of Winchester Interconnect. Both the buyouts are expected to strengthen the company’s Signal and Power Solutions segment.

The company continues to witness strong new business awards focused on delivering the advanced computing platforms, software capabilities and networking architecture. The company expects its portfolio of advanced technologies to continue driving growth through the second half of 2018.

A glimpse of the Aptiv’s share price trend reveals that the stock has had an impressive run on the bourse year to date. Shares of Aptiv have gained 10.7%, significantly outperforming the S&P 500’s 5.7% increase.

Quarterly Numbers in Detail

Revenues from the Signal and Power Solutions segment totaled $2.7 billion, increasing 13% on a year-over-year basis and contributing 72% to total revenues. Advanced Safety and User Experience revenues of $1 billion improved 27% year over year and contributed 28% to total revenues.

Adjusted operating income of $474 million was up 19.1% year over year. Adjusted operating income margin of 12.9% expanded 30 basis points (bps) year over year.

Aptiv ended the quarter with cash and cash equivalents balance of $970 million compared with $1.3 billion in the prior quarter.

Total available liquidity at the end of the second quarter was $3.3 billion compared with $3.7 billion at the end of the prior quarter. Cash flow from continuing operating activities summed $566 million in the quarter.

The company repurchased 0.04 million shares for roughly $4 million in the quarter, leaving roughly $836 million shares for future share repurchases under its existing share repurchase program. Aptiv paid cash dividend of $58 million in the quarter.

3Q18 Guidance

For the third quarter of 2018, Aptiv expects net sales to lie between $3.425 billion and $3.525 billion. The mid-point of the guided range is higher than the Zacks Consensus Estimate of $3.43 billion.

Adjusted operating income is expected in the range of $410-$430 million. Adjusted earnings per share are envisioned to be between $1.21 and $1.26. The Zacks Consensus Estimate for earnings is pegged higher at $1.29.

2018 Guidance

Aptiv raised its 2018 guidance for earnings and net sales. The company anticipates earnings to be in the range of $5.30-$5.40 per share compared with the prior guidance of $5.20-$5.40 per share. The mid-point of the revised guided range is lower than the Zacks Consensus Estimate of $5.37.

Net sales are envisioned between $14.35 billion and $14.55 billion compared with $13.95 billion and $14.35 billion anticipated earlier. Notably, the revised guided range is higher than the Zacks Consensus Estimate of $14.25 billion. Adjusted operating income is expected in the range of $1.79-$1.82 billion compared with the previous guidance of $1.75-$1.83 billion.

Zacks Rank & Upcoming Releases

Aptiv currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Avis Budget (CAR - Free Report) , Genpact (G - Free Report) and Delphi Technologies (DLPH - Free Report) .  While Avis Budget and Genpact will report their quarterly numbers on Aug 7, Delphi Technologies will release results on Aug 8.

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